7 Tips to Excel at Online Trading

How investors can excel at online trading and generate profits when buying and selling stocks, forex, cryptocurrencies, and other financial markets.

Free Book Preview Money-Smart Solopreneur

This book gives you the essential guide for easy-to-follow tips and strategies to create more financial success.

April 16, 2021 4 min read

Opinions expressed by Entrepreneur contributors are their own.

What does it take to be good at online trading and make buying and selling stocks, forex, cryptocurrencies, and other financial markets on the internet?

1. Online trading vs. investing

Online trading is a , active method for making money investing. It differs to the long-term investing approach advocated by . It is closer how the famous ‘ Wizard’ Paul Tudor Jones plays the market. Online trading offers an amazing opportunity for making an independent income using the internet, BUT it’s not for everybody. Before investing your money and time into online trading, it is worthwhile investigating first if it’s right for you.

Related: What You Need to Know Before Getting Into Online Trading

2. Find a good online trading app

Online trading can be done using your smartphone, tablet, or desktop computer. It is important to find trading companies that offer an online trading platform that can be used on any of these devices. The online broker or bank should be regulated by a government agency from a reputable country like FINMA in or the in the . Among the top online trading apps, the cost of trading is usually comparable, but you should make sure the commissions and bid/ask spreads are acceptable.

3. Take a free online trading course

There are many free online trading courses available on the internet, as well as paid options. No one course teaches you everything you need to know about online trading- most of these lessons come from experience. Learning concepts like lot size, pips, leverage, and placing an order in trading will not take long but are necessary to understand how online trading works. Ideally, choose a trading course that explains the different trading styles and trading strategies available.

Related: How to Start Investing

4. Choose a trading style

Broadly speaking, you can be a day trader who does day trading, a swing trader who does swing trading or a position trader than does position trading. You can break this down further into strategies like scalping. A scalper aims for very quick in and out trades to make a short-term profit or loss. How much time you can allocate to trading will play a big part in which trading style you choose. If you have a few hours per day, you can day ; a few hours per week would be more suited to swing or position trading styles.

5. Learn a trading strategy with risk management

It is not necessary to reinvent the wheel. Find a reputable trading mentor or trading educator that explains some simple trading strategies. Over time, you will alter the strategy to suit your own personality. Something important to get right from the start is incorporating risk management, which in simple terms is making sure you don’t risk too much on a trade. A simple strategy of buying and selling on forex signals is easy to learn, but there is no way to manage the size of the winning and losing trades. Harmonic trading is one example of an advanced trading strategy that incorporates trading risk management.

Related: How to Diversify Investments: 4 Easy Tips to Help You Get Started

6. Use a trading plan to set goals

All the best traders use a trading journal and set a trading plan. This plan can be adopted from already written trading plan templates. It will give details like how many trades to place per day, how much money you will deposit into your trading account, your financial goal for the end of the year, etc. There is also the decision over which financial markets to choose, for example, naked call options on tech stocks. Keeping this trading plan to hand will help encourage consistency in your trading.

7. Be persistent, keep your trading discipline

It is this final point that separates the consistently profitable traders from the rest. Conditions in financial markets will vary, which means your online trading results will vary too. It is important not to change trading strategy too quickly. Try to learn from your experience and use your trading journal to do more of what created winning trades and less of what led to losing trades. Whatever it takes to maintain your discipline, including some good R&R, is worthwhile.

By Entrepreneur Source Link

LEAVE A REPLY

Please enter your comment!
Please enter your name here